the question is, why does vita need memory cards to do something the gameboy cartridges could do?

I doubt Sony's losing much if any on the Vita. If Sony took a decent loss on Vita and the memory cards, they'd sell more systems, sell more memory cards, and make more money off games, meaning that publishers would make more off games and publishers would release more games.

The biggest issue with Sony's overpriced memory cards is that yes, while they're gaining a profit on memory cards, keeping them extremely high priced means they're losing money on digital sales. Digital sales don't go through retail meaning both Sony and the publishers don't have to split the money with a retailer. Sure they might make $40 profit on a 32GB memory card, but 32GB means a minimum of eight games. Even if all games were 4GB in size and all four of those games were $20, Sony would atleast make $80 right there. Around twice as much as they make for overcharging for memory cards.

Didn't Sony say there are an average of 10 games sold per Vita? Whatever loss they make any of this they'd make back even if that average is lower with more Vitas sold.

wow how is this still a question.
Memory card price is not the barrier to purchase.
Can you disagree with this next statement?
What Vita needs is the mass market.

You can't disagree, right?
Well then there are memory card bundles, and the average consumer doesn't even know they need a memory card. Having to pay an extra 20$ for a 4gb or whatever is not going to deter someone who is at the register with cash in hand ready to buy a vita.

The only people who are up in arms over mem card prices are core and hardcore gamers. Neither of which are the key to the vita's success.

Memory cards aren't the reason why it's not selling, but it's the reason why they're not making extra money they could be.  If someone is interested in a 32GB memory card, you can be sure they're interested in purchasing a lot of digital content.  Cheaper memory cards means more space for digital content, meaning more "possible" sales.

That's not exactly true though. They could just be storing free ps+ games

they are relatively expensive to make, compared to other memory cards, because they have a lot of security to prevent people hacking the Vita. Also because capitalism, and they have a monopoly on Vita memory cards, so they can charge however much they want.

Even so Sony is gouging you to play titles you already paid to rent. Those games are not free in the strictest since. Higher margin purchases should be subsized. At least they would have happy publishers. That means more titles.  They need a 250 model with 64 GB and a game probably a high quality ps+ title or let you pick from a variety. They would only be subsidizing the card at that price.  

qft.

Discs don't have a area where save data can be stored. While Carts have a memory chip on board. So data has to be on secondary cards or internal memory.

Not necessarily true at all. If you are able to produce enough of it and find the right factory, you will probably be able to produce it quite cheap, actually (much cheaper, considering many costs of popular products are actually advertising...hence why in store brands are way cheaper yet still make higher margins)